Lokendra Singh Ranawat, Co-founder of Woodenstreet.com, has worked in many reputed organizations such as Birlasoft (UK) Ltd, Axis IT&T, Keane in India and London. After gaining a rich experience of 10 years from these renowned companies, he initiated WoodenStreet, which is considered as India’s fastest growing online platform for customized furniture.
India has witnessed the 3rd largest startup ecosystem in the world and is home of 21 unicorns valued at $73.2 billion. Although the novel coronavirus pandemic has fallen off 70% from the statistical point of view of launching startups in India from 2019 (3,500) to 2020 (1,050), but the funding amount and deal count have made a massive raise of $13.7 billion in 1044 deals in 2021.
The above stats have crystal clear the notion of supporting the growing age of startup technology. Generally, the businesses are categorized as of two types, namely product-driven and service-based. The distinct difference between the two is that the product-driven company focuses on their physical and tangible product and strives to improves so that their customers must always get contentment in shopping with them. On the other hand, service-based businesses have the strong emphasis on building the relationship with their clients and in improving their own skills.
Talking about the product-based startups, they are involved in the product-related teams such as engineering, user experience and product experts. These type of startup founders or entrepreneurs focus entirely on delivering the best quality and hassle-free experience to the customers.
With this, they also believes that a great product most often sells itself. But, they are only partially correct. Because, when the company is in the startup mode or when the branding value is low or nill, the entrepreneur focal attention is to successfully launch their physical products in the market. And here comes the biggest challenge in amplifying or creating a base for the emerging product-based startup is in the limited costs.
That’s where supply chain management is critically important in the scaling up businesses of product-driven startups, and it must be the focal attention.
Product Life Cycle
Every product, regardless of its sector, undergoes four distinct phases:-
1. Launching Phase
In this phase, the product has recently been introduced whereby the demands are very low. Thus, resulting in the lower need for capacity in manufacturing and warehousing.
2. Growing Phase
In the growing phase, consumers have started learning about the beneficiary of the product, purchasing it and offering reviews about their experience. At this point of view, the feedbacks are invaluable to refining the product.
3. Maturity Phase
In this phase, sales begin to flatten as demand stabilizes.
4. Market Declining Phase
At the end of the product life cycle, demand and sales get taper off. Now no longer the product meets the demands of the consumers or has been replaced with newer or some other similar products.
Thus, the better management of product life cycles has saved many of the unicorn’s lifespan from dwindling and dying. Usually, all the products pass through these four stages but in few cases, it might be different. For instance, in 2009, the demand for N95 masks had risen up tremendously in India with a swine flu outbreak. But the demand had fallen sharply with the improvement of swine flu. Then, suddenly the masks demands have immensely grown in 2020 because of the COVID-19 pandemic.
Supply Chain Response or Importance in Product Life Cycle
In the first phase of the product life cycle, where the product is at the introductory age, the supply chain plays a crucial role in this. Its focus is to drives service and fulfill consumer needs rather than reducing or limiting costs. After reaching prominent sales and branding, the startup must shift from a low-volume supply chain to a higher-volume supply chain. As the product gets matured, the focus must shift from fulfilling sales orders to improving the supply chain management or efficiency to reduce the costs. In the end, when the product still be available to consumers but at the lower production cost, at this time, the startup goal must be to maximize the distribution and whereby, increase in the supply chain efficiency becomes more crucial at this stage.
Therefore, the innovation in supply chain management is quite important in every phase of product based businesses to meet the demands of consumers and save the costs at possible way. I hope the above points are up to the mark for the realization of the importance of a good supply chain is embracing the business growth of startups.
In the end, I just want to pace the importance of supply chain in product startup industry by this beautiful quote:
“If Supply Chain had an arch-enemy, it would be called ‘Bad Communication’.”